Why Are Real Estate Deals Getting Bigger and Better?

With the people’s increasing confidence in the potential of real estate investments, large real estate deals have been on the rise for a few years now. Recently, investors inked a number of large commercial real estate deals in the country, which is a sign of emerging confidence for opportunities for a sector where allocations continue to increase rapidly.

In January, Frasers Commercial Trust sold a centrally located mixed-use development in downtown Singapore, known as Cross Street Exchange. It was sold for S$811 million (US$602 million). A little less than two weeks after this deal, the Seoul-based Mastern Asset Management took over the ARA-owned Alpharium Tower office building in Pangyo. This deal closed for a whopping KRW 1.02 trillion (US$853 million).

During the pandemic, such big real estate deals had become rare. However, over the last few months, there has been an increase in the number of significant real estate deals. The logistics sector has started seeing an increase in such deals of more than US$300 million.

Real Estate Market in India

After being affected by the global pandemic and almost coming to a standstill for about two years, the real estate market in India has now started to pick up steam. As per several reports, it is anticipated that momentum will continue to increase in the coming years. This is a result of the robust demand in the real estate sector. Furthermore, it is also estimated that the overall real estate market including both commercial and residential spaces will have a brighter outlook in the coming years.

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Despite the global pandemic, the real estate sector has continued to show resilience and increased growth in the last few years. While the first wave of the pandemic brought the real estate sector to a relative standstill for a while, the market picked up pace shortly after. Then, the second wave of the pandemic hit the market just as it had started to revive itself. However, unlike the impact of the first wave, the ramifications of the second wave were not as prominent or prolonged. In addition to that, the festive season in the country led to the real estate sector’s prominent growth.

Currently, real estate developers and other entities still have a voracious desire for property acquisition. As per the reports, different developers closed several real estate deals worth thousands of acres of land across the country. In order to establish initiatives across a range of real estate asset classes, businesses with financial means are targeting prime properties in strategic locations across the country. Strategic locations in a particular area are defined by their easy accessibility to prominent nearby hubs. For instance, the Golf Course Extension Road in Gurgaon is an excellent example of a strategic location. It offers good connectivity to Delhi NCR and other major cities in the country, has a robust infrastructure and a well-established social substructure comprising reputed educational institutions, medical centres, and entertainment facilities. Certain top real estate companies such as Mahindra Life Spaces, Godrej Properties, Hetero Group, Oberoi Realty, Maple Tree Logistics, and Microsoft have purchased huge land for commercial and residential purposes in the country.

Large Deals

It is estimated that the deal sizes will continue to rise in the upcoming years in the Asia Pacific. This is in part considering the sheer weight of capital hunting for commercial real estate spaces. Furthermore, data from JLL real estate trends predicts that Asian institutions may have to position about 34 per cent more capital into the real estate market to meet the target of 11.5 per cent of the actual allocation to real estate in their portfolios.

In the spotlight: Logistics

As per the JLL Asia Pacific Capital Tracker 4Q21, it was revealed that the logistics sector of real estate is leading the pack when it comes to investment volumes. This real estate sector saw a tremendous rise in total capital deployed in the past two years. The increased interest of real estate investors in logistics, combined with the recovery from the effects of the global pandemic across the retail, office, and hotel industries, drove a massive 26 per cent increase in Asia Pacific’s commercial real estate market in the recent past. Furthermore, direct investments in the sector reached US$177 billion. In addition to that, another survey by JLL revealed that most real estate investors believe that transaction volumes will rise further in the upcoming years, with about 50 per cent showing a greater preference for larger assets.

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Adani Realty is a top real estate company in India, offering a range of luxurious residential and commercial properties in India. Samsara Vilasa 2.0 in Gurgaon, The North Park in Ahmedabad, Ikaria in Ahmedabad, and Samsara (M Block) on Golf Course Extension Road in Gurgaon are few of the brilliantly-designed projects in the country. These projects are curated with world-class infrastructure and come equipped with state-of-the-art amenities and facilities. Furthermore, these properties are strategically located and provide easy access to major hubs in the area in order to help ease the everyday commute of the residents and buyers.

Summing Up

Conclusively, it is estimated that the demand for residential as well as commercial spaces in India will continue to increase in the near future. One of the reasons behind the increased demand is that the country’s urban landscape has changed in favour of the real estate sector. Furthermore, the real estate sector offers a plethora of significantly bigger deals with promising long-term benefits, enticing real estate investors to invest.

Adani Realty is known for its stellar delivery reputation and legacy of building some of the most luxurious structures in the country. They promise a comfortable yet luxuriant lifestyle to our residents, along with access to world-class amenities and facilities for a secure living experience. Their trust and excellence are integrated with beautiful design aesthetics and cutting-edge construction techniques to develop exemplary projects in India’s most promising cities.